The federal government will today give the green light to a sweeping overhaul of the superannuation system by creating new, low-cost investment products, requiring greater disclosure of fees and fund performance, and streamlining back-office functions.

Fees are expected to be cut by about 40 per cent over the long term, resulting in a typical middle-income fund member reaching retirement age with an extra $40,000 in their final superannuation balance.

The Assistant Treasurer, Bill Shorten, will announce the government's response to the Cooper review into the future of the super system in Melbourne this morning.

The government is understood to have accepted 139 of the Cooper review panel's 177 recommendations including its central proposals for a low-cost ''MySuper'' default product aimed at the vast majority of fund members who are regarded as passive investors.

Mr Shorten will announce that the government aims to modernise the back-office functions of the industry through the ''SuperStream'' package of measures to reduce the costs of the huge volume of transactions by super funds.

The government has estimated the reforms will lower costs in the superannuation system by a cumulative $65 billion over the period to 2035, with the savings passed on to fund members in lower fees.

Other reforms will focus on the self-managed super by strengthening the independence of auditors, while the Australian Prudential Regulation Authority will be given new powers to set prudential standards for the superannuation sector.

The government established the review - chaired by the former Australian Securities and Investments Commission chief Jeremy Cooper - last year to examine the governance, efficiency, operation and structure of the system.

It will portray its response to the review as the most significant structural reforms since the advent of industry super in the 1980s.

Mr Shorten will argue that despite having the fourth biggest pool of retirement savings globally, the Australian superannuation sector does not have a single fund in the top 25 retirement funds internationally and is being burdened with unnecessary costs through fragmentation and a lack of scale.

The MySuper reforms will allow fund trustees to offer a simple product with a single diversified portfolio of investments for the majority of fund members who are already in the default investment option in their fund.

MySuper offerings are expected to have lower costs than existing products and to have less onerous administrative requirements on trustees.